Israel is a small country. We know, that isn't news. But it turns out that Israel is even smaller than we thought. Israel Discount Bank was put on the block four months ago, but due to the welter of conflicts of interest, the government still has not been able to find a minister to oversee the sale.
The finance minister and accountant general are supposed to handle sales of state-owned banks. But it quickly turned out that both were barred by conflicts of interest from handling Discount's sale. Finance Minister Benjamin Netanyahu's lawyer, Yitzhak Molcho, is representing one of the bidders, the Rubin brothers of England. Netanyahu foresaw a potential conflict of interest, and therefore, asked that another minister take charge of the sale. And Accountant General Yaron Zelekha recused himself because his brother is an attorney in Molcho's office. A small world.
The cabinet decided to entrust the sale to Justice Minister Yosef Lapid. But it turned out that Lapid also had a conflict of interest. He discovered something that he thought might cause him a problem, and therefore, asked to be replaced.
The cabinet acceded and appointed Housing Minister Tzipi Livni in his stead. But she asked to be released due to overwork. Now the cabinet must entrust the sale to yet another minister, and the current candidates are Transportation Minister Meir Sheetrit and Health Minister Dan Naveh.
Sheetrit, however, is also likely to be eliminated due to conflicts of interest, because his wife, Ruth, has business ties with Dudi Weissman, one of the owners of Co-Op, and Weissman's partner, Matthew Bronfman, is bidding for Discount.
Ostensibly, all these ministers deserve praise for upholding the principles of transparency and full disclosure. This is a standard worthy of emulation. Former finance minister Avraham Shochat acted similarly in 1997, when he transfered responsibility for the sale of Bank Hapoalim to Yossi Beilin because his son worked for Eliezer Fishman, who was bidding for the bank.
Yet it is impossible to avoid the suspicion that Discount is a special case that does not reflect the normal standards of economic decision-making in cases where capital and government intersect. The Discount sale is a huge, well-publicized enterprise in which many people are involved. Sooner or later, the personal ties between the ministers and the bidders would have come out.
The truly worrying cases are the less well-publicized ones. Our business and political worlds are studded with endless favors, shortcuts, protekzia and exploitation of personal ties that the public never sees or knows about.
Every MK has a banker friend; every minister has two attorneys; every high-powered lawyer has five clients from five different parties; every regulator supervises his former (and perhaps future) bosses, who left the public sector for the business world. These ties always existed and always will. And if it were possible to expose them in the small, everyday cases as well - if every official, MK and minister refrained from dealing with
matters in which his friends and associates were involved - our political and business worlds would undoubtedly be far cleaner.
In the meantime, however, our system is based more on the standards of that champion of political appointments, Tzachi Hanegbi, than on those demonstrated by Lapid and Netanyahu.
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